NIFTY ACHIEVES 8404 TARGET, AND MORE

US indices lost about a fourth of a percent amidst geopolitical events and ahead of earnings season.

Nymex crude rose $2.22 or 4.5% to $51.43 a barrel, its highest since March 4 after Saudi Arabia and its Gulf Arab allies began airstrikes in Yemen, sparking fears of a bigger Middle East battle that could disrupt world crude supplies.

Weekly jobless claims fell 9000 to 282000, the lowest level since mid-February. Flash services PMI for March rose to 58.6 from a final reading of 57.1 in February.

Gold rose $8 to $1205 an ounce.

European markets fell 0.2%-1.4%.

AT HOME

On the final day of the March derivative series, benchmark indices nosedived two and a quarter percent, registering worst fall since 6th January and ending at the lowest level since 14th January. Sensex plunged 654 points to settle at 27458 while Nifty finished at 8342, down 189 points. BSE mid-cap and small-cap indices lost 0.8% and 1% respectively. Except a 0.1% higher Capital Goods index, all the BSE sectoral indices ended in red with IT index and Bankex leading the tally, giving away 2.6% and 2.5% respectively.

Readers would recall that ever since Nifty had broken 8670, a lower-top lower-bottom formation on the daily chart came into effect. Since then we had been working with the target of 8404, which was the 61.8% retracement level of the entire 7961-9119 upmove. The benchmark yesterday plunged 189 points to settle at 8642, achieving this target.

However, oscillators on the hourly and daily chart continue to be negative and further weakness cannot be ruled out.

8322 is where the 34-week moving average is placed, a breach of which can take Nifty to the crucial 200-DMA support placed around 8170.

In this scenario, “Sell on Rallies” would be the advise. 8500, the top made yesterday, is the immediate resistance, with the stop loss of which short positions can be held on to.